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TMI Blog10(37) of the Income Tax ActX X X X Extracts X X X X X X X X Extracts X X X X ..... Sir, My client urban agricultural land compulsorily acquired by the Government of Karnataka on 24/1/1996 and approved cash compensation and concessional price site allotment of one site for every one acre of land acquired. Cash award compensation received on 2/4/1998 28/8/2008. Site allotted on 5/6/2014. Assessee deposited to Bangalore development authority sum of Rs. 30 lakhs on 5/6/2014 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... get the two sites at concessional value. Government registered two sites on 25/04/2017 in assessee name. Assessee sold the two sites at guidance value of rs. 1.53 crore on June 2017. My query is 01. Compulsory acquisition of urban agricultural land in exempted under Income tax Act ? 02. What will be the cost of acquisition for sites sold on June 2017?. 03. Can I adapt guidance value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1.53 cr as cost of acquisition (treating it has enhanced compensation) as this is the value in April 2017?. Kindly advice. - Reply By Padmanathan Kollengode - The Reply = 1. Compulsory acquisition of urban agricultural land is not covered under section 10(37) of Income Tax Act, 1961 . Moreover, the acquisition is not under RFCTLARR Act, 2013. Hence, in my view it was taxable in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year of acquisition ie 1995-96. 2. Since no income is offered under section 56(2)(x) (which is applicable from 1-4-2017 only), the actual amount paid of Rs.30 lakhs shall be cost of acquisition/ improvement. 3. In my view no for the reasons explained above. - Reply By Bayyareddy DK - The Reply = Sir, Cash award and Two sites received are part of compulsory acquisition of the agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral land as decided in 1996 order. These two sites are allotted in 2014 by paying Rs. 30 lakhs (concessional value) registered on April 2017 and sold by the assessee in June 2017 for Rs. 1.53 Cr. 01. What is the cost of acquisition of the two sites? 02. These two sites are allotted at concessional value of Rs. 30 lakhs because of land acquisition by the Government. So Rs. 1.53 guidance valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as on April 2017 will be value of the cost of acquisition in my view as it is enhanced compensation? 03. Is BR Shetty case applies here where cost of acquisition fails, so capital gains are not taxable?. Please advice - Reply By Padmanathan Kollengode - The Reply = 1. In my view it is not enhanced compensation as generally enhanced compensation means when the transferee is not satisfied wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h original compensation and he approache court/ releavnt forum who orders the enhancement of compensation. In this case, the facts are not so. However, I would not dispel your proposition completely as the documentation regarding compulsory acquisition, compensation and allotment are not verified. 2. Assuming that you want to treat the allotment at concessional value as enhanced compensa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, then it will be liable to capital gains. ( section 45(5) provides for the computation) 3. In no case, B.C. Srinivasa Shetty - 1981 (2) TMI 1 - SUPREME COURT can be pressed in to operation here as cost of acquisition is not indeterminable. In my opinion, it would be amount paid for allotment Rs.30 lakhs. - 10(37) of the Income Tax Act - Query Started By: - Bayyareddy DK Dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed:- 6-9-2023 Last Replied Date:- 7-9-2023 Income Tax - Got 3 Replies - Income Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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